SOVEREIGN WEALTH FUNDS

SOVEREIGN WEALTH FUNDS

State owned investment funds comprised of a country’s reserve capital.

 

Sovereign Wealth Funds often have a higher degree of risk as they often take large ownership stakes and allocate heavily to emerging/developing markets. SWF’s tend to be opportunistic investors during economic decline.

MAJOR CONSIDERATIONS

  • Focused on larger funds and more established managers

  • Can be highly selective

  • Can make opportunistic investment commitments

  • Can have a long due-diligence process

  • Often like co-investments

  • Can be important anchor or cornerstone investors for regional funds

TYPICAL ALLOCATION

SWFs have an aggregate alternatives allocation of around 27% of total AUM.

 

HOW DO SOVEREIGN WEALTH FUNDS INVEST?; State Street Global Advisors

https://www.ssga.com/investment-topics/asset-allocation/2018/how-do-sovereign-wealth-funds-invest.pdf

 

LARGEST SWFs

  1. Government Pension Fund Global, Norway; AUM - 1.1T

  2. China Investment Corporation, China; AUM – 950Bn

  3. State Administration of Foreign Exchange, China; AUM - 690Bn

  4. Kuwait Investment Authority, Kuwait; AUM – 592Bn

  5. Abu Dhabi Investment Authority, UAE; AUM – 580Bn

  6. Hong Kong Monetary Agency, Hong Kong; AUM – 531Bn

  7. Saudi Arabian Monetary Agency, Saudi Arabia; AUM – 510Bn

  8. GIC, Singapore; AUM – 510Bn

  9. Qatar Investment Authority, Qatar; AUM – 330Bn

  10. National Social Security Fund, China; AUM - 325Bn

PreQin 2020

ARTICLES OF INTEREST​

THE WORLDS BIGGEST SWF CRACKS DOWN ON COAL; Aljazeera

https://www.aljazeera.com/ajimpact/world-biggest-sovereign-wealth-fund-cracks-coal-200513174741826.html

 

THE LONG TERM STRATEGY OF GULF SOVEREIGN WEALTH FUNDS; Asia Times

https://asiatimes.com/2020/04/the-long-term-strategy-of-gulf-sovereign-wealth-funds/

 

GOVTS WORLDWIDE DRAWDOWN ON THEIR SWFs; Trinidad & Tobago Guardian

http://www.guardian.co.tt/news/govts-worldwide-drawdown-on-their-sovereign-wealth-funds-6.2.1114107.0636893706

 

EXTERNAL MANAGERS DELIVER 4.1BN EXCESS RETURN FOR SWF; CityWire

https://citywireselector.com/news/external-managers-deliver-4-1bn-excess-return-for-norwegian-swf/a1347812